Friday, October 17, 2014

Today’s New Residential Construction Report showed mixed results with total permit activity and total start activity improving while single family permit activity declined since August.

Single family housing permits, the most leading of indicators, declined 0.5% from August to 624K single family units (SAAR), but increased 1.1% above the level seen in September 2013 and still remained well below levels seen at the peak in September 2005.

Wednesday, October 15, 2014

Today, the U.S. Census Bureau released its latest nominal read of retail sales showing mixed results in September with sales dropping 0.3% from August but rising 4.3% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services.

Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales declined slightly, falling 0.14% from August but rising 2.16% above the level seen in September 2013 while, adjusting for inflation, “real” discretionary retail sales declined 0.38% on the month but rising 0.33% since September 2013.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) decreased 9 basis points to 4.08% since last week while the purchase application volume decreased 1% and the refinance application volume increased 11% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

Net private sector jobs increased 0.20% since last month climbing 2.25% above the level seen a year ago and climbing 1.61% above the peak level of employment seen in December 2007 prior to the Great Recession.

Today's employment situation report showed that conditions for the long term unemployed mostly improved in September while still remaining distressed by historic standards.

Workers unemployed 27 weeks or more declined to 2.954 million or 31.9% of all unemployed workers while the median term of unemployment increased to 13.3 weeks and the average stay on unemployment went declined to 31.5 weeks.

Today's Employment Situation report showed that in September “total unemployment” including all marginally attached workers declined to 11.8% while the traditionally reported unemployment rate also improved falling to 5.9%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.